Equity benchmarks ended three days of gains to close marginally in the red on Monday, after weak Q1 results from TCS weighed down by global cues and strong selling in IT counters.
The rupee fell to a new lifetime low against the US dollar, further reducing risk appetite.
The 30-share BSE Sensex, which opened on the backfoot, saw strong buying in the afternoon trade. However, it could not maintain the momentum and closed down 86.61 points or 0.16 per cent at 54,395.23.
Similarly, the broader NSE Nifty ended 4.60 points or 0.03 per cent lower at 16,216.
Bharti Airtel, TCS fall
Bharti Airtel was the biggest loser among Sensex constituents, falling 5.03 per cent, followed by TCS, falling 4.64 per cent, as its earnings failed to match market expectations.
Software exporter TCS on Friday reported 5.2 per cent growth in the June quarter at Rs 9,478 crore, restricted by the impact of annual salary hikes and promotions, which took operating profit margins to multi-quarter low.
Other IT stocks, buoyed by results, also took heavy losses in Monday’s session, with HCL Tech, Infosys, Wipro and Tech Mahindra falling up to 4.10 per cent.
top gainers
In contrast, Tata Steel, Mahindra & Mahindra, Dr Reddy’s, ICICI Bank, Asian Paints, Axis Bank and Reliance Industries rose up to 3.04 per cent.
“As the domestic market turned its focus towards quarterly results, a weak opening in IT earnings hurt sentiments, with the benchmark indices opening on a weak note. However, with support from banking, metals and energy stocks, the domestic market declined. “Its losses have flattened out,” said Vinod Nair, head of research, I. Geojit Financial Services.
Ajit Mishra, Research VP, Religare Broking, said that amid mixed global sentiment, the focus should be on earnings for the upcoming macroeconomic data (IIP and CPI) and cues.
He said, “We reiterate our positive outlook and expect Nifty to test 16,500 soon. Participants should align their positions accordingly and follow the ‘buy on dips’ approach of Nifty till 15,900 levels. Must continue together.”
Among broader markets, the BSE’s smallcap gauge rose 1.07 per cent and the midcap index rose 0.63 per cent.
Among the BSE sectoral indices, tech was the biggest loser at 3.08 per cent, followed by IT (2.70 per cent), capital goods (0.38 per cent) and telecom (0.06 per cent).
Strong gainers of electricity, oil and gas
Electricity emerged as the biggest gainer with a jump of 4.21 per cent, followed by utilities (4.17 per cent), oil and gas (1.97 per cent) and energy (1.84 per cent).
World markets fell ahead of the release of US inflation data, indicating further rate hikes by the Federal Reserve.
In Asia, markets in Shanghai, Hong Kong and Seoul fell after reports that China fined tech giants Tencent and Alibaba. However, Tokyo closed in the green.
European stock markets fell in mid-session deals. On Friday, the US markets closed with a mixed trend.
Meanwhile, international oil benchmark Brent crude fell 1.48 per cent to $106.3 per barrel.
On Monday, the rupee depreciated by 22 paise to close at a new life level of 79.48 (provisional) against the US dollar.
Foreign institutional investors remained net sellers on Friday, selling shares worth 109.31 crore, according to exchange data.
Published on
11 July 2022